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Indian Railway orders 12,611 wagons through Reverse Auction

Steel News - Published on Fri, 14 Dec 2018

Image Source: Deccan Chronicle
DNA reported that the Indian Railways have started issuing orders for the wagon tender floated earlier, giving a much-desired push to the freight movement in the country. This comes at a time when lack of adequate wagons has been hurting industries across the sectors, including power. The current order for 12,611 wagons of the total of 21,758 units has come as a lifeline for the ailing wagon-making industry, which has suffered due to tepid order flows from their key customer, the railways. The tender was finalised through the reverse auction process, a first for the railways as part of a larger policy decision by the government to procure most of the items through this method.

The idea behind going for the reverse auction was to bring down costs for the government, as suppliers compete against each other to bring down prices in a process where the last bid price is revealed to every competing bidder. As per the conventional tendering process, price bids are put in sealed envelopes as there were frequent allegations that competitors sometimes formed cartels and mutually decided their bid prices.

On the surface, this wagon reserve auction process has led to higher price discovery, as for the commonly used BOXNL variety of wagons, prices per wagon have been decided at INR 29,39,000 a unit against INR 24,02,000 decided in the last tendering which was opened in December.

Titagarh Wagons has been the biggest beneficiary in this first round bagging order for 5,058 wagons followed by Jupiter Wagons (2,894) and Modern Industries (2,643) among others who would be required to supply open wagons before February 2020.

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Posted By : Ratan Singh on Fri, 14 Dec 2018
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